How to use options to make money if the market goes UP, DOWN, or SIDEWAYS

Gen Y Finance Guy Investing, Options 19 Comments

A few months back I published a post about my large cash position. That position has only continued to grow as I find it difficult to put on any new investments at these lofty prices. As I stated previously, I have no idea when the market will turn, all I know is I don’t want to be left holding the bag when it does. That’s not because I don’t think that over the long-term the prices will be higher, but rather because I believe there are much better prices ahead (like around the corner). I also believe that the opportunity cost of sitting on the sidelines (holding out for lower prices) is much lower at this stage in the bull market (now 6+ …

My plan for $63,000 in Cold Hard Cash

Gen Y Finance Guy Financial Markets, Investing 41 Comments

Before you read any further would you do me a favor? Could you help spread the word by sharing this post on social media? It’s no national secret that my investment accounts are largely flush with cold hard cash. As I write this post my brokerage accounts have a total net liquidation value of $102,000 (rounded number). Of the total liquidation value I have $39,000 invested, with the remaining $63,000 sitting in cash. Most of the personal finance bloggers out there would likely advise me to continue putting money to work regardless of the fact the stock market is at ALL TIME HIGHS. However, I have a much different philosophy. I agree that the market has had an incredible run …

Example of Buying Into Weakness – Investment Rule #1

Gen Y Finance Guy Financial Markets, Investing, Options 22 Comments

“Dude, suckin’ at something is the first step to being sorta good at something.” -Jake, “Adventure Time” A few days ago I wrote a post laying the foundation for my 10 rules for investing. In rule #1 we discussed what it means to buy into weakness. After some good dialogue with you guys in the comments of that post, it dawned on me to include a real example of what it actually looks like to buy into weakness. It was a comment by Mr. Maroon that helped spark the idea when she said: Enter Mrs. Maroon When we first started aggressively trying to save money for investments and actively watching our balances, we agreed that the very best approach was to …

Buy Into Weakness – Investment Rule #1

Gen Y Finance Guy Financial Markets, Investing, New Rules, Options, Words To Live By 24 Comments

Over the course of the coming weeks and months I will be laying out the investment rules that I live and die by. These are rules that I have developed over the last ten years as both a retail and professional investor and trader: Rule # 1: Buy into weakness. Rule #2: Sell into strength. Rule #3: Reduce cost basis. Rule #4: Keep investments small. Rule #5: Keep 80% of total invested capital in ETF’s and up to 20% in individual names. Rule #6: Choose duration over direction. Rule #7: Manage your winners. Rule #8: Manage risk at order entry. Rule #9: Increase your # of occurrences. Rule #10: Make investments with a probability of profit > than 50%. (Note: …